Tech investors ignore stock comp at their peril 15 Feb 2022 Companies like Uber adjust for awarded share grants in favorite figures that show increasing profitability. But unlike tech firms of yore that had sizable net incomes, like Facebook, stock compensation is a big part of those earnings. It’s a skewed representation of expenses.
Canada’s tech darling may be headed for a fall 14 Feb 2022 Shopify already fell off its perch as Canada’s most valuable listed company, but the e-commerce giant’s $105 bln valuation is still in the stratosphere, at over 100 times forecast EBITDA. With tech investors jittery, even a minor slipup could lead to a sizeable correction.
Zendesk’s best M&A strategy starts with failure 14 Feb 2022 The software firm’s unpopular $4 bln bid for SurveyMonkey’s parent has pushed down its stock, irked activists and provoked a $16 bln opportunistic private equity bid. Zendesk’s shareholders can still vote down its deal. Doing so might secure a higher price for their own shares.
Twitter share buyback is an odd way to take flight 10 Feb 2022 New CEO Parag Agrawal plans to repurchase $4 billion in stock. He will also spend more to improve tepid revenue growth. But tough competition and the $30 bln company’s slim slice of the ad market mean Agrawal could do with keeping more in the coffers to help him hit his targets.
Viewsroom: Spotify, Peloton and failed chip deals 10 Feb 2022 Neil Young’s podcast protests have shone a light on a potential flaw in Spotify’s business model, says Liam Proud. Peloton highlights the danger of giving company founders too much voting power, Rob Cyran argues. And semiconductor M&A gives global antitrust regulators agita.
Uber looks like a tech stock in the worst ways 9 Feb 2022 The ride-hailing firm is expected to grow sales rapidly. But that isn’t coming easy – or cheap - and the valuation is now in line with Netflix. As investors decide to look more closely at the fundamentals of tech darlings, Uber has more troubling attributes than the good ones.
Facebook’s future rests on Reels, not metaverse 9 Feb 2022 Mark Zuckerberg’s iffy bet on virtual reality cost Meta Platforms $10 bln last year. But the $600 bln social network has gotten higher returns for investors by improving on ideas that already exist. The best way to stop its decline is to copy its biggest competitor TikTok.
Dutch $64 bln payments star is cure for tech gloom 9 Feb 2022 Adyen’s stock surged 10% after its results showed accelerating revenue. Following the rout in shares like PayPal and Netflix, it’s a reminder that piggybacking on the digital economy is a good bet. The catch for investors is that the best firms still trade at crazy valuations.
Facebook $250 bln slump punctures antitrust case 7 Feb 2022 That’s how much Mark Zuckerberg’s firm Meta Platforms lost in value after growth stalled. Competition from TikTok specifically is getting tough, but U.S. antitrust regulators who are fighting Facebook have said the Chinese-owned app isn’t a rival. The market begs to differ.
Snap investors have too many stars in their eyes 4 Feb 2022 The messaging app’s shares soared 50% even though it warned ad privacy changes could hit revenue – something that clobbered Meta Platforms. They share risks, including an ascendant TikTok. Snap looks extra pricey given it lacks peers’ ability to hurl money at new problems.
Tech slump forces IPO hopefuls to consider Plan B 4 Feb 2022 Fintech Klarna, payroll provider Justworks and mobility upstart Lime are among those that were planning a listing in 2022. Yet tumbling valuations are prompting a rethink. Profitable companies can afford to wait. Others may have to find a buyer, or merge with a blank-cheque firm.
Capital Calls: Playtech breakup 3 Feb 2022 Concise views on global finance: After investors rejected a 3.2 bln euro buyout offer from rival Aristocrat, a breakup of the gambling software maker looks the best way to maximise value.
Facebook’s grip on online ads may be slipping 2 Feb 2022 Parent Meta Platforms lost some $200 bln of market cap after an earnings report that suggested weaker-than-expected advertising growth to come. Headwinds ranging from Apple to TikTok are part of the problem; Mark Zuckerberg’s expensive pivot to the metaverse doesn’t help.
Mark Zuckerberg’s startup project bets the company 2 Feb 2022 Meta Platforms has signaled a $10 bln hit to 2021 operating profit from investments in nascent virtual- and augmented-reality worlds. The founder has lots of advertising cash from his social networks to deploy. But reinventing an 18-year-old firm is a real-world uphill challenge.
MicroStrategy is storing up bitcoin bother 1 Feb 2022 The $4 billion company’s digital currency holdings now account for almost all of its enterprise value. CEO Michael Saylor may be happy running what increasingly looks more like a crypto vehicle than an analytics and software business. But he is inviting more regulatory scrutiny.
Apple supply shortages are a good problem to have 27 Jan 2022 Tech investors fear the pandemic pulled forward demand, especially for cloud-based companies. The $2.6 trln Apple has the opposite issue. Covid-fueled supply-chain woes have prevented it from satiating iPhone demand. Customer loyalty probably means these sales will come later.
Capital Calls: Crocs knows how to pandemic 11 Jan 2022 Concise views on global finance: The rubber-clogs maker’s sales are going gangbusters, and it has used lockdown success smartly to expand with a trendy acquisition.
Capital Calls: SEC, UK housing, Marijuana 10 Jan 2022 Concise views on global finance: The U.S. watchdog wants more private company transparency; The UK government’s decision to hit housebuilders with a four billion pound repair bill has lessons; and cannabis producer Tilray gives a glimpse of its life after its merger with Aphria.
Capital Calls: Enel’s payments punt 24 Dec 2021 Concise views on global finance: The 70 bln euro utility is paying up to 361 mln euros for a relatively pricey punt on fellow Italian payments firm Mooney.
Zuckerberg has metaverse rivals who mean business 23 Dec 2021 Meta Platforms and Epic Games are trumpeting visions of an immersive, 3D internet. But even ignoring the technological challenges, consumers’ appetite for full-on virtual socialising is uncertain. The corporate world is a more manageable target – and that is Microsoft’s domain.